Adopting new technology can be a daunting process for organizations. For some companies, change is an uncomfortable concept that many avoid at all costs. “If it isn’t broke, don’t fix it”, they say. But today, the logistics industry is more dynamic and competitive than ever. Ignoring innovation and refraining from technology is a sure way to lose profit. Here are some of the reasons why adopting new technology in your business can increase revenue, improve operational efficiency, and position your company for success.
Becoming a Competitor
In 2019, the 3rd Party Logistics (3PL) industry was valued at around $220 billion. That is up almost 50% from 2009. This growth, despite the pandemic, is expected to continue. With a saturated market, the question becomes: how do I make my logistics operation competitive?
Bruce Merrifield answers this in his book Research Technology Management, stating, “The most viable strategy for both generating and sustaining a competitive advantage has become one of both continuous innovation and corporate renewal.” With a hyper-competitive market, protecting your company’s market share is a just as important as developing a market penetration strategy. By adopting new technologies your company becomes a part of the innovation and puts you in a competitively advantageous position.
Today, there are more vendors, supply routes, and customers in the logistics industry than ever before. Having an operational strategy is not enough, companies must be efficient. For example, if a supply chain does not have optimized routes, they are susceptible to unnecessary costs and low-profit margins.
Beyond this, integrating the various pieces of a supply chain network is critical to success. For large logistics companies, information management and coordinating activities can be overwhelming challenges. By investing in Transportation Management System (TMS) software, companies can increase supply chain visibility, reduce costs, and improve operational efficiency.
Listening to Your Market
Maintaining the balance between a reliable and flexible supply chain can be a complex task. However, rest assured that having a flexible network that can adapt to a changing environment is just as important as having a reliable one. The COVID-19 pandemic is a prime example of the necessity of having a real-time flexible supply chain. When interruptions impact the industry, having the ability to adjust for demand can set you ahead of your competition.
Additionally, customers are increasingly demanding real-time feedback and network flexibility. This expected standard of real-time flexibility is only obtained through adopting transportation management technology. It isn’t just the customer expecting these changes. Vendors and supply chain partners are also hesitant in doing business with networks that lack this technology. Companies that innovate their supply chain management systems will see dramatic results in customer and vendor satisfaction rates.
The logistics industry is in a critical phase of development. With more customers, more product, and faster expected deliveries, supply chains must adapt to stay ahead. Adopting new technology is the key to adapting.